After Senate objects, state holds off on Staten Island project

ALBANY — Republicans who control the State Senate are putting the brakes on a Staten Island development project that the Cuomo administration proposed to give $16.5 million in subsidies.

The subsidies are for the Lighthouse Point project, which includes a hotel, 100 housing units, “an urban beach” and shops arranged in a faux streetscape to create “a charming old-world merchant village” on an abandoned Coast Guard parcel just south of the St. George Ferry terminal, according to its developers.

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The state proposed to give developers a $1.5 million grant — awarded through a system of regional economic development councils that Gov. Andrew Cuomo created in 2011 — as well as a $15 million forgivable loan that was drawn from a state fund which Republican senators created to support projects on Long Island.

Lighthouse Point is part of a trio of projects — including the New York Wheel and Empire Outlets — near the ferry terminal that city, state and Staten Island officials say will revitalize the borough's struggling North Shore and the immediate St. George neighborhood.

The Empire State Development corporation approved the subsidies at a November meeting. According to loan documents and an agency spokesman, the principal amount of the loan would be forgiven if the project resulted in 110 full-time employees — half of what developers had stated in 2014 when they leased the land from New York City.

ESD's documents say the extra $15 million was awarded to “close the financing gap” for developers, and noted “development costs for the project are higher because of the poor condition of the existing historic buildings and other challenging site characteristics.”

As with all disbursements from public authorities, ESD's actions have to be ratified by the Public Authorities Control Board, where representatives of the governor and leaders of the Senate and Assembly each have veto power. The Lighthouse Point subsidies appeared on a draft agenda for Wednesday's PACB meeting, but were pulled at the Republicans' request after nearly three hours of back-and-forth between Cuomo aides and Senate staffers.

Officials refused to elaborate on those discussions, but the PACB's chairman, Adrian Swierczewski, said during the meeting that the delays were the result of “a number of scheduling conflicts.”

In an interview, state Sen. John DeFrancisco of Syracuse suggested that he and the Republicans had concerns about the project developer, Triangle Equities, which has made little progress developing the site since it won a request for proposals from New York City in 2006. According to documents filed with ESD, Triangle Equities has committed equity for 10 percent of the $209 million project — while seeking the $16.5 million in subsidies from the state, $6.2 million from New York City, $10.1 million in federal tax credits and $131 million in loans, as well as other unspecified tax equity and subsidy programs.

“It is a complex project,” DeFrancisco, the deputy Republican leader and chair of the Senate finance committee, said. “There's different financing sources and different capital requirements that have to be met. It seems to me that what it is is to make sure each of these elements are attainable rather than approving one piece of it and then finding out that different pieces are not attainable.”

A Triangle Equities executive did not return a call seeking comment.

The Lighthouse Point project would have been the first to draw from the “transformative investment fund,” a $400 million pot of money inserted into this year's state budget at the request of Senate Republicans. It had broad criteria for spending — eligible projects in New York City or Long Island need to “create or retain private-sector jobs” and “enhance the environment and quality of life for New York State residents” — but was included to offset $1.5 billion that Cuomo sought for an economic development competition upstate.

All nine state senators from Long Island are Republicans, as was the leader during budget talks — Dean Skelos — and current majority leader John Flanagan. Skelos said in April that he and his colleagues would “have a say” in how the monies were spent, but DeFrancisco said he was not aware of any requests. The area is represented by State Sen. Diane Savino, a member of the Republican-allied Independent Democratic Conference.

Skelos was convicted last week of using his official position to pressure companies with business before the state to give money and jobs to his son, Adam.

ESD spokesman Jason Conwall did not answer questions about the process for spending from the transformative investment fund, or whether any legislator had earmarked the funding. While he has publicly railed against earmarks, Cuomo has overseen a new earmarking program that in three years has expanded to $1.3 billion.

Swierczewski said he hoped the PACB could schedule another meeting by year's end to vote again on the Lighthouse Point subsidies, as well as $1.85 million for an office complex in downtown Albany that, according to Conwall, ESD held back because it needed to analyze the results of a public hearing.